EUROPEANS who live in cold climates tend to prefer their holiday homes nearby and served by a no-frills airline, but have you ever wondered where our friends across the pond buy?

While Florida and California remain as popular as ever with North Americans, a large number are prepared to venture even further south for their dream place in the sun - to a place where you get a lot more for your dollar.

Costa Rica, which lies between Panama and Nicaragua in the thin slither of land that is Central America, is an ex-pat haven with a Caribbean climate and cheap property prices - it could be America's Spain.

But despite the obvious Spanish influence on this Latin American country, Costa Rica is a unique land of contrasts.

While one coast lies on the Pacific popularised by surfers, salsa and ex-pats, the other coastline belongs to the Caribbean - and there are plenty of Lilt-advert style beachfront villages that move to the beat of reggae tunes to prove it.

In the middle lies a hilly mass of rainforest and the capital, San Jose, a surprisingly modern city where the Canadian banks, shopping malls and gentrified Spanish squares stand in marked contrast with the more run-down first cities of its neighbours.

Penelope Lent is an American who has been working as a partner in her own estate agency, Lent Eckhart Properties, in the popular tourist area of Guanacaste on the northern Pacific coast, for the past four years.

Penelope says that Costa Rica has always appealed to her fellow Americans. "The baby boomers are facing up to retirement and thinking, `I want to go somewhere but where am I going to get the best value for my dollars?'"

While the Americans have made themselves thoroughly at home among the Costa Ricans, or `Ticos', Costa Rica is slowly coming to the attention of a new market - the British buyer.

Altrincham-born Mark Jackson-Kordas has lived in Costa Rica for 16 years, where he now owns and runs a San Jose-based estate agency, Isthmus Realty.

For Mark it was a combination of climate and lifestyle that enticed him to make the move from his previous adopted home of Canada.

"It is a very easy country to live in. There's no capital gains tax and it is openly welcoming to foreigners who want to live and work here. I think they like our `can do' attitude.

"The cost of living is low too, and taxes are based on what you spend rather than what you earn. It's known as the Switzerland of the Americas for its attitude to taxation."

Mark still makes regular trips to Manchester to visit his family, and recently helped a couple from Alderley Edge to buy their Costa Rican dream.

According to Mark they are just part of a growing number of Brits who are willing to invest in a country that we traditionally know little about in the UK.

Obviously, the 15-hour flight time would be enough to deter anyone looking for a weekend retreat, but for retirees or life changers the value for money offered in Latin America can be enticing.

With that in mind, it is easy to see why Americans might forgo the charms of the warmer US states and venture even further down south.

"Costa Rica is only a two-hour flight from Florida," says Penelope. "And it's also very user friendly. It's democratic and has a system of government that we understand. There is no threat of terrorism and Costa Rica has never been invaded; it doesn't even have an army.

"Add to that the fact that the climate is great and the people are incredibly friendly and well educated and it makes for a great life. You don't even have to be able to speak Spanish, you can easily get by with just English." Recent developments in the local infrastructure, including a new airport serving the popular tourist region around the Nicoya Peninsula on the Pacific coast, have served only to increase demand.

The changes have seen the profile of visitors change from predominantly backpackers and budget travellers to the more upmarket, especially since the prestigious five-star Four Seasons Resort opened in Guanecaste in January.

Penelope adds: "The real estate market is booming, especially around the north. We're now seeing people who are prepared to spend at least é100,000 on a place in a beautiful setting.

"But in the most popular areas there are no more beachfront properties, especially as the first 50 metres of coastline is protected public land anyway.

"People want to be able to see and hear the water and they are willing to spend é160,000 to é220,000 for a condo.

"I've got clients who have a few million dollars to spend, but there is just not enough properties of that kind around to satisfy demand. There are celebs buying here too, Michael Jordan bought two homes for é2m each recently."

Prices have risen accordingly, and Lent is currently selling a plot of land for é53,000 that the current owner bought for é32,000 in February.

"Raw land is the thing to buy if you are looking for an investment," says Lent. "Twenty five per cent of the country is protected land."

A number of Costa Rican estate agencies, including Mark's, have branched out into building new developments that cater specifically to the foreign buyer's needs.

More often than not these are gated developments, which are springing up around San Jose and the major beach resorts of the Central Pacific coast, North West Guanacasta and the Southern Nicoyan peninsula.

But not everyone who buys there is about to retire. For younger buyers looking for a complete life makeover the encouraging business climate is a great incentive.

Traditionally guest houses have been a popular way of making a living - and anyone looking for a ready built business could do worse than look at the property Neil Harwood is selling in the beach resort of Playas del Coco in Guanacaste. Neil, 57, and his Costa Rican wife Vilma , built the guesthouse in 1993 and ran it for nine years before Neil had to return to the UK to look after his elderly mother. So far Neil has had a few inquiries from Brits interested in the five-bed, three-bath house in the heart of the "American" zone and just 20 minutes from the airport. Having spent é27,000 on the land and the building of the guesthouse the Harwoods are now looking to sell for é60,000. With property price rises averaging 10-12 per cent a year it should be a sound investment.

What can you get for your money?

House in private reserve - é87,000 A three bed, two bath house with pool and Jacuzzi on a 250m2 plot within a 700 acre private reserve with private beach near Los Suenos (Los Suenos) marina on the central Pacific coast. Isthmus Realty.

Beach house with views - é300,000 A four bed, three bath beach house that has been recently renovated with a new pool and terrace area added, on a quarter acre plot and with views over the beach. Isthmus Realty.

House on private beach - é435,000 A luxury house right on the beach, with four beds and three baths. Next to golf on the popular southern Nicoyan Peninsula.